Thursday, January 21, 2016

Taking Risks

Southwest Airlines tried something new when it decided to create an airline based on a new low cost model and employees who were cheerful and funny. took risks when it created an all online mega store. eBay was also an entirely new concept. Industry insiders laughed at GEICO when it began advertising so heavily with a gecko spokesperson. Uber thought out-of-the box when it created its new model for paid vehicular transportation. Wegmans has a history of constantly trying new things and integrating them if they work and abandoning them if they don't. Tesla started a new car company based on the concept of an all electric luxury car. And they decided not to sell through dealerships. CarMax created an entirely new model for selling used cars. Abercrombie & Fitch repositioned itself from a staid century-old upscale sporting goods store to a hip clothing store targeted at the teenage market. 

Not all risks pay off. Saturn was a different kind of car company and a different kind of car but when it got integrated back into GM mainstream, it began to fail. Song Airlines, a Delta Airlines startup, was designed as a lifestyle brand targeting stylish hip professional women and focused on creating a new culture in flying. It started at the worst possible time for airlines, post 9/11.

My point with each of these brands is that wildly successful brands (and some that fail) usually step out of the box, break the industry mold and take risks. As a brand, you cannot win by doing what everyone else in your product categories is doing. 

I can't tell you how many clients have said to me, "But if we do that, we would be taking huge risks. No one else in the industry has ever done that before." I have also heard the following: "We just don't know how to do that." "That is not our area of expertise." "But then we would be entering a new product category." "Our shareholders would not allow that." "That is just too risky. What if we fail?" Gambling establishments are quick to point out that "you can't win if you don't play." The same holds true for brands. If you are unwilling to take any risks, it is almost certain that you will not stand out as a brand. In fact, every single brand that was successful over the history of commerce took a significant number of risks to achieve their success. That is just how it works. 

If you are unwilling to take at least calculated risks, your brand will never achieve the highly successful differentiation you would seek for it.

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